The draft of the EU Commission on the new criteria for adjusting non-performing loans gives 8 years time to banks to bring the provisions of a loan covered by guarantees to 100% and two years for unsecured loans. The text prepared by the sherpas of the EU Commission provides for it, according to Reuters, quoting a source who is following the dossier.
An increasing progression of coverage is expected for both loan categories, in particular non-performing positions of unsecured loans will have to have a 35% provision in the first year. It has not been possible for the moment to get a comment from the Commission.
L'EU executive is expected to release on March 13 its first pillar proposal for the new on-balance sheet coverage criteria for non-performing loans of European banks.
ECB supervision instead, it has drawn up an addendum to its second pillar guidelines, therefore non-binding and to be applied on a case-by-case basis, which is expected for 14 March.
The ECB guidelines, put up for consultation, so far envisage 100% devaluation in 7 years for guaranteed loans and 2 years for unsecured ones, with a linear progression.
It is not clear whether the ECB will ultimately decide to converge its proposal on the more flexible one indicated in the Commission's draft